WATERVILLE — The City Council on Tuesday took a first vote to approve a $41.9 million municipal and school budget for 2018-19 that would increase the tax rate by $1.94 per $1,000 worth of property valuation.

The council, which voted 7-0 to approve the budget, was able to reduce the tax increase from the earlier proposed $2.23 per $1,000 by increasing the amount of money the city had planned to take from a reserve funded by money received from Penobscot Energy Recovery Co. for ending its contract with the company. The original amount of $490,000 was increased to $800,000. The city was able then to decrease the amount it takes from the city’s surplus fund from $200,000 to $100,000.

The proposed municipal budget is $18 million; the proposed school budget is $23.9 million. The council is expected to take a final vote on the proposal June 19.

If the budget passes at that meeting, the current tax rate of $23.33 per $1,000 worth of valuation would increase to $25.27, representing a 7.6 percent increase in the tax rate. A taxpayer with a home worth $100,000 would pay $2,527 in taxes — an increase of $194.

City officials noted that the policy of maintaining a surplus of 12 percent of the latest budget was teetering as that percent already is down to 11.95 percent, which can jeopardize the city’s bond rating and its ability to borrow.

To a packed council chamber, Councilor Sydney Mayhew, R-Ward 4, said councilors, City Manager Michael Roy and Finance Director Heather Rowden worked diligently to minimize the increase in taxes. The city, he said, took in less revenue this year than last.

“We are in a very difficult financial picture for the city,” Mayhew said.

Councilor John O’Donnell, D-Ward 5, said the proposed budget would represent less spending than what the city spent last year.

“And that’s before the last round of cuts, right?” he said.

The budget increase is reflected mainly in increases in insurances and salaries that are determined through collective bargaining, over which the city has no control.

“It’s the insurance that’s killing us — and revenue sharing,” Councilor Lauren Lessing, D-Ward 3, said.

She was referring to revenue sharing municipalities are owed, but that the state is not giving.

Roy said that with only $100,000 left in the PERC fund and the surplus fund already below 12 percent, the city faces a problem next year.

“We’re going to be facing a big hole next year — no question about it,” he said.

Mayhew noted that the city is in a unique position in that it is the fifth smallest municipality in terms of land area in the state with 13 square miles. In comparison, Augusta occupies 54 square miles and has a tax rate of between $19 and $20 per $1,000. Thirty percent of Waterville is in tax-exempt status, according to Mayhew.

“Thirteen miles is not a lot of land mass, folks. That is why we are trying to encourage the growth of Trafton Road,” Mayhew said.

He said he has great empathy for residents on fixed incomes who must pay a tax increase.

“We just have so much stacked against us in the city of Waterville. There’s a lot to contend with,” he said.

Lessing said if more cuts are made, the city would be looking at gutting departments, including being forced to have a volunteer fire department.

“I just want to be clear, spending increases are largely related to the increased costs and benefits. That is not something we can control,” she said.

Mayor Nick Isgro said that in a year prior city officials told city departments and schools what the city can afford the next year and hopefully that is what the city can do again. He said it is difficult when collective bargaining results in big increases in salaries.

But O’Donnell said that by the same token, the schools are competing with other schools for teachers, and when teacher salaries are below other municipalities’ such as Winslow, teachers will go elsewhere to work.

“Good teachers are going to go across the river,” he said.

Former City Councilor Steve Aucoin urged councilors and Isgro to tell the governor and state Legislature to give municipalities the state revenue share they are owed. Waterville needs that money to run the city, he said.

“I haven’t heard this in all the discussions, and I think we should be looking at it very seriously,” Aucoin said.

Councilor Winifred Tate, D-Ward 6, said after the meeting that councilors are very concerned about any increase in the tax rate, but councilors have worked together diligently in meetings, looking at any possible ways to minimize the increase.

“Any further reduction in the budget will mean gutting personnel and programs that keep the city running,” Tate said.

The proposed tax increase of 7.6 percent the council voted on Tuesday is a far cry from the 13 percent increase Isgro said recently in a Facebook post that councilors were working behind the scenes to develop. He also maintained that councilors had been using an effort to recall him from office as a distraction from work on the city budget.

However, Roy and Council Chairman Steve Soule, D-Ward 1, said Isgro’s Facebook statement was false — that the proposed budget still is considered the city manager’s budget until it is transferred into the hands of the council — which occurred Tuesday. Isgro posted on Facebook last week that “on Tuesday, a budget will be presented that calls for raising your property taxes by 13% (over 3 mils). Yes, this is the same exact 13% figure I warned about a few weeks ago — the same one that some in the media and well-connected on the city council implied I was lying to you about. Some said I made it up.”

Isgro’s lengthy post said councilors have spent much time over the past year ignoring residents and “ignoring my many, many budget suggestions.” The post says councilors instead have been trying to remove Isgro from office.

“To City Manager Mike Roy’s credit, he did offer several suggestions to reduce the tax hike from 13% to around 10% even though by the charter this is the council’s budget. It seems our efforts are pushing things in the right direction. However, the city council would not even commit to this small reduction to the proposed increase. They will work diligently to remove me but they won’t budge an inch to help you.”

Resident Rien Finch stood before the podium Tuesday night during the community notes section of the agenda to say there has been confusion about what the mayoral recall is all about. Finch said it is about Isgro’s social media posts and then proceeded to list them.

According to Finch, they include a post in which Isgro responded to Pope Francis’ call for peace by posting: “Says a man constantly waging war on his own religion.”

“He again attacks the Pope when Pope Francis says, ‘If we fail to suffer with those who suffer, we need to question our own humanity,’ with comments over the church’s tax-exempt status,” Finch said.

In response to fellow Republicans condemning Roy Moore, Finch cited Isgro’s post as saying: “The cuckolded battle cry: Lose gracefully! It’s better than winning.”

Finch also said Isgro continues to attack immigrants, particularly refugees, and cited another of Isgro’s posts: “If immigration policy over the past 10 years was about what benefits Americans first, tuberculosis wouldn’t now be a thing in some parts of the U.S.”

“Not one of these has he apologized for,” Finch said, referring to Isgro.

When Finch was finished, Isgro smiled and called for the next person to speak.

After Finch spoke, Ward 1 resident Catherine Weeks, an Isgro supporter, said “supposedly there were 200 out of 887 signatures” on the petition to recall Isgro that were from Colby College students.

“Well, guess what — probably they don’t even know who Nick Isgro is, never mind Mrs. Isgro and their children,” Weeks said.

She said Colby students don’t care about the city’s high property tax, which has driven someone who has lived on her street 40 years to decide to move out.

“Those 200 wonderful Colby students are probably in the Hamptons for the summer and not caring what happens to us in Waterville,” Weeks said.

Meanwhile, City Clerk Patti Dubois emphasized earlier that Tuesday’s election will be 8 a.m. to 8 p.m. at Thomas College and she asked that motorists enter the campus via Vining Drive, south of the main entrance, near the athletic fields. Signs will direct voters to the polls at the athletic center, according to Dubois. She said they then can exit the campus via the main entrance to the college off West River Road.

The deadline for obtaining absentee ballots for no reason is 5 p.m. Thursday and the ballots must be returned by 8 p.m. Tuesday, election day, Dubois said. The deadline for obtaining absentee ballots may be extended for people who have special circumstances, according to Dubois.

Election results will be posted on the city’s website, www.waterville-me.gov, she said.

She asked that people be patient, as tallying recall ballots by hand is expected to take a few hours.

Amy Calder — 861-9247

[email protected]

Twitter: @AmyCalder17